Chartered Accountants Superannuation Bulletin Edition 18/2008

Welcome to this edition of the Chartered Accountants Superannuation Bulletin.

Issue No 18 /2008 7 October 2008 1. ATO updates 2. News and media releases 3. Certification of documents clarification 4. NTLG super technical sub-group 5. Audit of SMSF courses and SPAA 6. Masterclass for financial planning 2009 7. Training and development

23 September 2008

Self-managed super fund statistical report

The self managed super fund sector continues to grow and is now the largest sector in the superannuation industry. Please refer to this statistical report for information on the number of SMSF's opened and closed, asset ranges, demographics and asset allocation.

1 October 2008

Bilateral social security agreements

The following links provide explanations of the new bilateral social security agreements between Australia and;
Greece Germany Republic of Korea

Auditors working better but continued improvements necessary

Following a recent speech delivered by Assistant Deputy Commissioner of Taxation Ian Read, the Institute issued the following media release.

The Institute of Chartered Accountants in Australia (the Institute) acknowledges the improvements that have been made by auditors of self-managed super funds (SMSFs) and agrees with Assistant Deputy Commissioner Taxation, Ian Read that there have been signs of improvement in the performance of the industry, but cautions that further improvement is necessary.

The comments were made in light of a recent ATO review that found the level of Superannuation Investment Supervision Act (the Act) breaches has reduced dramatically in the past three financial years.

"While the ATO's review displays a significant improvement in auditing standards, when compared to the previous 2004 results there is still room for improvement. The 2004 results were different as they were a statistical benchmarking exercise and auditors were selected at random. The 2007/2008 results are from the ATO review programs and include a targeted selection of cases based on identified risk criteria," said Hugh Elvy, Head of Financial Planning and Superannuation, at the Institute of Chartered Accountants in Australia.

"The fact that a targeted campaign by the ATO has resulted in a reduction in SIS Act contraventions, when compared to a more general sample, proves that the betterments have been substantial."

"The improvement in the number of breaches can be put down to the work the profession has conducted through its education and awareness programs for auditors of SMSFs. However, despite the significant improvement, the accounting profession acknowledges further work is required," said Mr Elvy.

In February this year, the joint accounting bodies released a set of competency requirements for auditors of SMSFs. These competency requirements made it clear that auditors must be able to complete the tasks of planning, evidence gathering, evidence evaluation and decision making.

The issue of independence and conflicts of interest are areas noted by the ATO and these are areas the Institute has recently focussed on with communication and education to members. Last week the Institute, with the two other accounting bodies, released an independence guide which specifically outlines case studies relating to SMSFs and independence. This guide has been welcomed by the industry and the Institute's members.

"It is expected that the number of working papers rated as less than satisfactory, as the measurement of the quality of audit papers in the 2007/2008 results, will continue to improve over the next reporting period as the industry moves to continue to educate and develop requirements for auditors in their membership."

"The Institute will welcome the announcement of the SMSF guidance statement that will be released by the Auditing and Assurance Standard Board next month. The guidance statement represents the next step in a series of initiatives designed to assist, and enhance the role of auditors of SMSFs as well as helping trustees discharge their responsibilities." Mr Elvy said.

The Institute continues to work closely with the ATO and the standard setters as it develops further practical tools and guidance for professionals operating in the SMSF sector.

Temporary residents legislation introduced

Senator Nick Sherry, has announced the introduction into Parliament of legislation which will help address the Government's concerns over the growing amount of lost or unclaimed superannuation.

The Temporary Residents' Superannuation Legislation Amendment Bill 2008 and the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008 were both introduced in the House of Representatives on Thursday 25 September 2008.

Earlier this year the Institute did a significant amount of lobbying for changes on these two bills. Click here to read the Institute's temporary residents and superannuation submission.

Following on from an article published in a previous edition of Superannuation Bulletin, the Institute advises that Chartered Accountants are authorised to act as a Commissioner for Declarations in accordance with the Statutory Declarations Regulations 1993. Therefore an accountant is able to witness documents for the purposes of unclaimed monies. The restrictions outlined in the article apply to the transfer of monies using the portability provisions. Click here for further information about the portability provisions. Alternatively please refer to the original article below.

Changes to ATO advice no longer provides Chartered Accountants permission to formally certify claims for lost superannuation monies.

In the instructions issued by the Australian Taxation Office (ATO) Chartered Accountants are notably absent from the list of those who can certify documents relating to unclaimed or 'lost' superannuation monies.

The Institute advises members that the following persons can certify copies of the unclaimed superannuation document originals, as being true and correct copies:

• Bail Justice
• Barrister
• Commissioner for Affidavits
• Commissioner for Declarations
• Commissioner for Oaths
• Doctor
• Judge
• Justice of the Peace
• Minister of Religion (who is authorised to celebrate marriages)
• Police Officer (rank of Sergeant or above, or highest ranking officer in the station)
• Proclaimed Bank Manager
• Sheriff
• Solicitor

Recognised accountants which include Chartered Accountants have been excluded from this list.

Some larger superannuation funds have also adopted these rules as being appropriate when identifying a person when claiming benefits from a fund.

The certification rules are of a higher standard than for anti-money laundering identification purposes.

The Institute will hold discussions with the ATO and is seeking a change to this policy.

The next NTLG super technical sub-group meeting will be held in Melbourne in December. If there are any superannuation technical issues that members feel need to be raised by the Institute at this meeting, please email your suggestion to super.queries@charteredaccountants.com.au

The Institute is currently considering having its Audit of SMSF courses accredited/approved for SPAA training points. A consideration is the cost associated with obtaining the approval/accreditation and allocation of resources to review the SPAA standards. Currently the Institute is reviewing the number of members who are also members of SPAA and a decision will be made based on these figures.

For the past 10 years, AFR Smart Investor's Masterclass for financial planning has given Australia's financial planners the chance to showcase their expertise and technical know-how and how they use it to add value for their clients.

The AFR Smart Investor's Masterclass tests planners understanding of financial structures, tax, superannuation (including self-managed super funds), asset allocation, social security and investment strategies and how they can apply that knowledge to real like situations. Questions must be completed by an individual in one sitting. Calculators and reference books are permitted.

The AFR Smart Investor Masterclass for financial planning opened for registrations on Wednesday, 1 October 2008 and the competition will run until Friday, 31 October 2008. More information and entry details are available on the following websites, Asset magazine www.assetmag.com.au or AFR Smart Investor www.afrsmartinvestor.com.au

Chartered Accountants Technical Conference

Throughout October in Sydney and Melbourne. Addresses the latest legislation changes and technical details in separate streams for business and practice. The need–to–know updates that will make a difference to your growth.

Audit of Self Managed Superannuation Funds Workshop

Throughout October in Brisbane, Perth, Adelaide, Sydney and Melbourne. With the increase in the number of reviews and audits of self managed super funds to 11,000 and new competency requirements in effect, here is your chance to understand those requirements and ensure you comply.

Self Managed Superannuation Funds Seminars

Throughout November in Brisbane, Perth, Adelaide, Sydney, Parramatta and Melbourne. Are you across all the latest SMSF strategies? Accurately establish effective estate and pension plans for your clients.

SMSF Conference DVD 2008

Recorded at the successful inaugural conference in February 2008, this DVD contains all the papers and presentations to view at your convenience.

Disclaimers

This is an initiative of, and has been prepared by the Technical Standards Team of the Institute of Chartered Accountants in Australia. While every effort has been made to ensure the accuracy of the information contained therein, neither the Institute nor its employees shall be liable on any grounds whatsoever in respect of decisions or actions taken as a result of using this publication. The information provided is a general guide only and should not be used, relied on or treated as a substitute for specific professional advice or referral to the relevant specific standard.

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